GBP/USD pinned to 1.3100 after a gap lower on fresh Brexit angst

The Sterling is in retreat as Brexit headlines continue to deliver more bad news than good.
Hopes for a clean agreement ahead of Wednesday's summit are evaporating.

Joshua Gibson FXStreet

The GBP/USD is slumping into a notably bearish stance heading into Monday's London market session, struggling near the 1.3100 handle after weekend Brexit headlines drove the Pound into a bearish gap to start the week's trading, and the door remains open as buyers have been unable to close the gap.

Brexit back under a microscope as tempers flare

Brexit concerns have taken a harder edge for the upcoming trading week as the UK and the EU scramble to salvage a last-minute working deal ahead of Wednesday's European leader summit, where the outline of a plan was hoped to be presented. Eurosceptics that are populating the UK's parliament are increasingly calling for an all-out rebellion against UK Prime Minister Theresa May, with former Brexit Secretary David Davis lashing out at the PM for attempting to squeeze through a deal that would see the UK restrained within the EU's customs union for an undefined amount of time following Brexit, a solution that has severely angered the Brexiteer contingent.

Monday is a thin showing for the Cable on the economic calendar, and GBP/USD traders' attention will be split between Brexit headlines and Monday's upcoming US Retail Sales figures, due at 12:30 GMT with the headline core Retails Sales forecast to hold steady at 0.3%.

GBP/USD levels to watch

The Sterling is seeing hard pressures at the 1.3100 level after slipping on the market open, and Sterling bulls will have their work cut out for them if they're going to close Monday's gap to 1.3150, while the downside sees near-term swing lows from early October marking out a floor from 1.3030, and according to FXStreet's own Valeria Bednarik, "in the daily chart, the pair offers a neutral stance, as the pair held above a flat 20 DMA, while technical indicators turned lower, the Momentum confined to neutral readings and the RSI currently at 55, both lacking directional strength. According to the 4 hours chart, the pair risks extending its downward move, as it settled below a still bullish 20 SMA, while technical indicators maintain their bearish slopes in negative territory."

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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